Gazprom Marketing & Trading USA, Inc. (GMTUSA) and the Rabaska partners, Gaz Metro, Enbridge Inc. and Gaz de France announced Thursday that they have signed a Letter of Intent outlining the major terms under which GMTUSA will become an equity partner in the proposed Rabaska liquefied natural gas (LNG) regasification project and contract for 100 percent of the import terminal's capacity. The parties expect to execute definitive agreements
before the end of this year.
Using the Rabaska terminal, GMTUSA, a wholly owned subsidiary of OAO
Gazprom, expects to import Russian LNG supplied from the Shtokman liquefaction
project currently under development by OAO Gazprom, which anticipates initial
production of LNG from Shtokman in 2014. The Shtokman gas and condensate
field, discovered in 1988, is located in the central part of the Barents Sea,
approximately 450 kilometers northeast of the city of Murmansk, Russia. The
Rabaska terminal is designed to be capable of receiving, storing and
re-gasifying imported LNG with a nominal natural gas send-out capacity of
500 million cubic feet per day.
"The development of new markets and products is key to Gazprom's global
energy strategy," said Alexander Medvedev, Deputy Chairman of the Management
Committee of OAO Gazprom. "Delivering LNG produced at Shtokman to new Atlantic
basin gas markets is keenly important to us, and Quebec and Ontario are
attractive markets. Shtokman and Rabaska are two solid projects and the
agreement announced today testifies to their significance, both from an
economic and energy perspective. We are pleased to announce this progress
toward our first major investment in North America, which will form an
important component of our global LNG strategy."
"This is definitely a major milestone for Rabaska and its three partners.
We are very pleased that Gazprom is joining us in advancing the Rabaska LNG
project," said Sophie Brochu, President and CEO of Gaz Metro. "Our
collaboration with Gazprom is extremely promising for the future and confirms
the viability and competitive strengths of our project. Through this venture,
Quebec will be connected to one of the world's largest natural gas fields,
which will contribute to diversification of its gas supplies while enhancing
Quebec's competitiveness. "
"The Rabaska LNG project will deliver the critical infrastructure needed
to bring an important new source of natural gas supply to Ontario and Quebec,"
said Stephen J.J. Letwin, Executive Vice President, Gas Transportation and
International for Enbridge. "This new supply will benefit the two provinces'
growing number of natural gas consumers, many of whom are customers of
Enbridge Gas Distribution, as well as support Ontario's increasing emphasis on
natural gas to fuel environmentally responsible power generation. Gazprom's
involvement in the Rabaska LNG project gives strong momentum to advancing this
project and meeting those needs."
"This major step for Rabaska comes, in particular, as the result of the
confident relationships Gaz de France has established both with Gazprom for
more than 30 years and with Gaz Metro and Enbridge in Quebec. LNG will bring a
growing contribution to the supply of the natural gas markets and we are
looking forward to contributing to the success of Rabaska thanks to our
40-year experience in LNG, and to our experience in operating the
Montoir-de-Bretagne and Fos-sur-Mer regas facilities in France." said
Jean-Marie Dauger, Chief Operating Officer of Gaz de France.
Rabaska has already obtained the key federal and provincial government
approvals to proceed with construction of the terminal in Levis. Construction
would be timed to meet the anticipated first LNG deliveries in 2014.
OAO Gazprom is Russia's largest company and the world's biggest natural
gas producer, with reserves of 29 trillion cubic meters (1020 TCF) and
produces approximately 550 billion cubic meters of gas per year (53 billion
cubic feet per day). Gazprom's share in the overall global and Russian proven
gas reserves is some 17 percent and over 60 percent, respectively. Gazprom's
market capitalization currently amounts to more than $300 billion. Gazprom
Marketing & Trading USA Inc. is the U.S. subsidiary of wholly owned Gazprom
Marketing & Trading Ltd., a London-based company that was established in 1999
to manage Gazprom's marketing and trading activities in liberalizing markets
in Western Europe. Gazprom Marketing & Trading USA Inc. was formed in July
2006 to serve as the platform for entry into the North American market.
Rabaska, a limited partnership between Gaz Metro, Enbridge Inc. and Gaz
de France, is an $840 million project to build a terminal in Levis, Quebec for
tankers carrying liquefied natural gas (LNG). The Rabaska terminal is intended
to introduce a new source of natural gas supply to the Quebec and eastern
With more than $3.3 billion of assets and 1,300 employees in Quebec, Gaz
Metro is a leading Quebec energy company and one of Canada's largest natural
gas distributors. Gaz Metro serves about 171,000 customers in Quebec through a
distribution network of almost 10,000 km.
Through its wholly-owned subsidiary, NNEEC, Gaz Metro has been active in
New England's energy industry since 1986 and has nearly 300 employees there.
NNEEC owns Vermont Gas Systems, the sole gas distributor in Vermont, and Green
Mountain Power Corp., the second-largest electricity distributor in that
Gaz Metro is also present in the natural gas transportation and storage
sectors as well as energy services. Gaz Metro also participates in various
development projects in the energy sector. In partnership with Boralex, Gaz
Metro is developing two wind farm projects on the lands of the Seigneurie de
Enbridge Inc., a Canadian company, is a leader in energy transportation
and distribution in North America and internationally. As a transporter of
energy, Enbridge operates, in Canada and the U.S., the world's longest crude
oil and liquids transportation system. The Company also has international
operations and a growing involvement in the natural gas transmission and
midstream businesses. As a distributor of energy, Enbridge owns and operates
Canada's largest natural gas distribution company, and provides distribution
services in Ontario, Quebec, New Brunswick and New York State. Enbridge
employs approximately 5,500 people, primarily in Canada, the U.S. and South
The Gaz de France Group is a major energy player in Europe. As the
leading natural gas distributor in Europe, Gaz de France employs nearly 50,000
employees and earned (euro)27 billion in sales in 2007. The Group holds a
portfolio of some 14 million clients, approximately 11 million of which are in
Gaz de France, first European LNG importer and third worldwide, currently
owns and operates two LNG terminals; Montoir-de-Bretagne, Europe's largest
natural gas regasification facility with an LNG storage capacity of 360,000 m3
which receives more than 15% of the natural gas imported in France, primarily
from Algeria, Nigeria and Egypt, and, Fos-sur-Mer (Fos Tonkin) which supplies
the south of France with natural gas imported in the form of LNG from Algeria.
Gaz de France will soon operate a third terminal in France at Fos Cavaou,
presently in its final phase of construction.
In addition, Gaz de France holds a 10% participation in Petronet LNG
which operates the Dahej terminal in India, and has access to re-gasification
capacities in the Isle of Grain terminal in Great Britain, Huelva and
Cartagena in Spain and Sabine Pass in the USA.